States Can Deliver Low Work Comp Premiums and High Benefits
Wednesday, November 4, 2009 | 0
A few states deliver high levels of benefits to injured workers at low premium rates, and a few deliver low benefits at high premium rates. Peter Rousmaniere's assessment of each state's work comp system not only tells us which states fall into which categories, but provides insights into the 'why' as well.
For example, New Jersey, New York and Montana have the highest work comp insurance costs, but very low benefits. And Massachusetts is at the opposite end of the spectrum, with low premiums and high wage replacement benefits for injured workers. (Massachusetts doesn't treat providers nearly as well, as the Massachusetts fee schedule is among the lowest in the country, while medical costs are not.)
Peter delves into the whys, and among his findings are:
- Five states deliver both low premiums and high wage-replacement benefits (Iowa, Arizona, Virginia, Nevada, and Massachusetts.)
- Five states are the polar opposite, with high premiums and low benefits (Alaska, California, New Jersey, New York and Montana)
- And then there's the majority of states which fall in between costly/poor benefits and cheap insurance/good benefits.
While some states seem stuck in a dysfunctional morass, making little progress, California's recent success in dramatically reducing premiums and costs should encourage all state legislators to get cracking. Reform can be done, even in a state as large and diverse as California. Montana, which is tiny by comparison and much more homogeneous, should find reform a much less difficult task.
What does this mean for you?
Find out how your key states are ranked, and you may well find where you've got problems in your comp program.
Joe Paduda is principal of Health Strategy Associates, an employer's consulting firm based in Connecticut. This column was reprinted from his blog on workers' compensation and healthcare, http://www.managedcarematters.com
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